Biz hardly happy with download plans

TiVo’s plan to allow users to download TV shows and films to Apple’s iPod and Sony’s PlayStation Portable (PSP) could strain relations with networks and studios hoping to develop revenue streams from digital distribution.

Several TV and studio execs told Daily Variety that they were considering legal action against the company, whose main product has huge brand awareness but is increasingly being pushed aside by no-name DVRs offered by cable and satellite companies.

The pioneer of the digital video recording biz called the move an “enhancement” of its TiVoToGo service, which allows users to transfer recorded shows to a PC. The new software, which will be released early next year, allows users to transfer these files to a portable player.

“We’re making it easy for consumers to enjoy the TV shows they want to watch right from their iPod or PSP,” said TiVo CEO and former NBC exec Tom Rogers.

Reactions to the service ranged from skeptical interest to outright hostility at the TV networks and film studios as they scrambled to examine its legal and business implications.

“TiVo appears to be acting unilaterally, disregarding established rights of content owners to participate in decisions regarding the distribution and exploitation of their content,” an NBC Universal spokesman said. “This unilateral action creates the risk of legal conflict instead of contributing to the constructive exploitation of digital technology that can rapidly provide new and exciting experiences for the consumer.”

But others saw TiVo’s move as more a sign of opportunities to come than a threat.

“In addition to focusing on the legal issues, it’s also important to focus on the fact that consumers are saying this is the kind of thing they want,” noted Kevin Tsujihara, prexy of the Warner Bros. home entertainment group. “We’re excited about the fact that people are buying portable devices and are looking for video content on them. It’s potentially a huge market for us.”

Ironically, controversy comes a week after the Big Six networks declared that DVRs actually benefit the broadcast biz because they generate more viewership for the hit shows.

But while such devices were hailed as benign if not beneficial to the ad-supported television business, the latest feature being added to TiVo could change the tenor of the relationship.

“I’m sure they will have an opinion, and we will reach out to people to help them understand our perspective,” said TiVo veep of product marketing Jim Denney.

The immediate impact of the service, which will be offered soon after the new year, would be to undercut ABC’s video-on-demand offering, through which users can buy episodes of “Lost” and other shows for $1.99 each to view on PCs or video iPods.

NBC and CBS recently began offering skeins on-demand for 99¢ through DirecTV and Comcast, respectively.

Nets are planning other on-demand initiatives on the Internet and through cable and satcasters.

TiVo’s service may diminish the appeal of these offers, as well as cut into the DVD business, which has been supported over the past few years by the release of TV skeins such as “Sex and the City.”

Initially, the additional portability may not affect that status quo too much, especially because the universe of people who can currently use the service — owners of a stand-alone TiVo box who also have a home-networking system — is only about 300,000. Company’s total sub base, all of whom could use the service if they invested in home networking equipment, stands at 1.3 million.

Moreover, just because consumers use TiVo doesn’t mean they won’t also buy shows online or on DVD.

“People who are into these types of vehicles tend to dabble in more than one,” said Russ Crupick, an analyst at NPD Group.

By adding the service, TiVo, which has been struggling to find a growth driver, is hoping to differentiate its box from generic DVRs offered by cable and satellite providers.

While the additional feature is free, necessary software will cost $15-$30.

(Ben Fritz in Hollywood contributed to this report.)

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